INC Research, a therapeutically focused global CRO privately held by Avista Capital Partners and Ontario Teachers' Pension Plan, and CRO Kendle International, have jointly announced a definitive merger agreement. Raleigh, N.C.-based INC Research will acquire Kendle in an all-cash transaction with a total equity value of approximately $232 million.

Cincinnati-based Kendle is a global CRO with extensive expertise in phase I-IV clinical development and more than 3,000 associates in 31 countries worldwide.

INC Research will acquire all of Kendle’s outstanding shares for $15.25 per share in cash, representing a 60.5% premium over Kendle's closing share price on May 4, 2011. This represents a premium of 51.3% over the 30-trading day average of Kendle's closing price.

Kendle’s board of directors unanimously approved the transaction, which is expected to close in the third quarter subject to approval by Kendle's shareholders as well as satisfaction of customary closing conditions and regulatory approvals.

"Joining forces with INC Research is the right decision for our customers and shareholders.  Combining our highly complementary assets will provide the scale and scope for the combined company to deliver outstanding global teams, therapeutic expertise and operational excellence for clinical trials of all sizes," said Kendle President and CEO Stephen Cutler, Ph.D.

"The combination of INC Research and Kendle will enable us to deliver broader capabilities and reach a critical mass for the emerging drug development outsourcing and alliance partnership models," said James Ogle, CEO of INC Research. 

The combination strengthens both businesses by creating a global CRO with significant therapeutic capability and geographic diversity.  The combined company will rank among the top-tier CROs based on size and scale and will be well-positioned to handle large-scale global trials.

As a result of the proposed merger transaction, Kendle's annual meeting of shareholders has been postponed from May 19, with a new date to be determined by Kendle's board of directors.

In connection with the transaction, J.P. Morgan Securities acted as Kendle's financial advisor and Keating, Muething & Klekamp acted as its legal advisor. Morgan Stanley acted as financial advisor and Weil Gotshal & Manges acted as legal advisor to INC Research.